When the City of Toronto switched benefits plan insurers in 2017, it changed its coverage for biologics and biosimilars. Under its previous plan, the City reimbursed employees for the drugs their doctors recommended and prescribed; now, it follows its new insurer’s mandatory biosimilars policy, while grandfathering any plan member who was already taking a biologic under the previous plan.

“As long as you don’t change anything in the medication you’re getting, the prescription or the dosage, you’re [grandfathered] for that prescription,” says Hatem Belhi, the City’s director of pensions, payroll and employee benefits. “As soon as anything changes, you have to go with the biosimilar unless there’s [a medical] exception for you.”

In numbers

In the first phase of B.C.’s biosimilar switching policy,
73% of patients —
or 15,100 out of 20,780 — switched to the biosimilar. This included:

• 71% — or 13,100
of 18,420 — of patients on Lantus,
a long-acting insulin;

• 84% — or 340
of 410 — of patients who take Remicade for diabetes, psoriasis and rheumatoid arthritis; and

• 85% — or 1,660
out of 1,950 — of patients on Enbrel, which is used to treat five chronic diseases.

When transitioning from a biologic drug to its biosimilar equivalent, there’s medical switching — a physician switches a patient from one medication to another when they’re no longer responding — and non-medical switching — the design of a benefits plan encourages a switch in order to generate savings.

Read: B.C. government says expanding biosimilars will save nearly $100 million over three years

The latter has stirred an increasingly growing debate in the industry, with two provinces — British Columbia and Alberta — now implementing a non-medical biosimilar switching policy for certain patients. Meanwhile, Ontario proposed similar changes in 2019, which Belhi says he’s watched with interest.

“As a public entity, we are trying to make sure we are responsible in the way we use the public funds we manage at the City while making the plan really sustainable [and] also attending to employee needs. [We’re] trying to balance all of that, but of course, any changes in the marketplace, be it the Ontario government or any other public entity that adopts different practices, we are very interested in learning about that.”

Legislative moves

Though Ontario has yet to announce an implementation date, it would become the third province to introduce a policy, following in the footsteps of B.C., which rolled out a three-phase policy between May 2019 and August 2020, and Alberta, where a mandatory switching policy is set to go into effect in January 2021.

Read: Proposed changes to Ontario drug rules target generics pricing, biosimilar listing process

Other jurisdictions aren’t yet exploring the option, but the majority have implemented preferential biosimilars listing policies for certain patients. Nova Scotia and Saskatchewan give most biologics and biosimilars the same listing status, with exceptions for treatment-naive patients of select diseases.

In general, private plans have so far lagged behind public payers in adopting biosimilars. A September 2020 report by health benefits manager HBM+ found that for several medications where both a biologic and biosimilar product was available, the share of biosimilar claims was consistently lower in private drug plans than in public ones. For example, the biosimilar version of infliximab, a medication that treats a number of autoimmune diseases, including rheumatoid arthritis and Crohn’s disease, made up just 7.9 per cent of all private claims for that medication and 13.1 per cent in public plans.

What’s in it for plan sponsors?

B.C. and other provinces with pharmacare systems offer the clearest incentive for following their lead, says Barbara Martinez, national practice leader for drug solutions at
Canada Life Assurance Co.

In B.C., once an individual has spent their drug plan deductible, the province will pay 70 per cent of drug expenses, with the private plan taking responsibility for the rest. “If you’re not forcing the switch to the biosimilar then you’re likely paying the full cost of the biologic and that could represent an increased cost to private payers,” she says.

Read: Mental-health conditions, specialty meds driving drug plan cost increases in 2019: report

While most provinces don’t integrate public and private plans, there may still be value in adopting similar policies to reduce drug spend and allow for an easier transition to the public plan should it be required, says Joanne Jung, pharmacy practice leader in Canada at Willis Towers Watson.

There’s been a low uptake in biosimilars to date, she notes, “because private payers say members have choice, but when you leave it open like that, most don’t naturally go to the biosimilar, the majority will still go for the [biologic]. You need policy to actually delist the biologic brand for either new starts or have a switching policy.”

Some insurers have adopted preferential biosimilar policies, including Green Shield Canada, which implemented preferential listing in February 2018 and offers plan sponsors, like the City of Toronto, non-medical switching policies.

Canada Life will follow Alberta’s policy next year by only reimbursing the cost of the biosimilar and requiring any patients on biologics to switch to the biosimilar where it exists and is safe for them to do so, says Martinez. “That way, we’re going to ensure we’re fully integrating with those . . . provincial regulations or standards and that will mean lower costs for plan sponsors.”

Not a simple choice

Another benefit of aligning with the provinces is that insurers can work with them to provide support and education to patients around switching, she adds.

Read: How are insurers using block-level contract amendments to control drug costs?

“Biosimilars have relatively low market share in Canada [and] that would lead one to believe that physicians and patients aren’t well-educated and need some support around understanding why they should switch. . . . There’s a whole education component to making sure that both the patient and the physician really understand why it’s done and why it’s safe to do.”

Suzanne Lepage, a private health plan strategist, notes that while switching policies can help reduce plan sponsors’ drug spend, it’s not a simple choice. “Medically, it’s not always the best choice for all patients and there should be the opportunity for exceptions based on medical needs.”

Private plans also have different aims than public plans, she notes. “A public plan is not concerned about workplace productivity [or] long-term disability. They don’t consider things that are important to private plans, so maybe mimicking a public plan isn’t the best choice for a private [plan].”

Kelsey Rolfe is a freelance journalist based in Toronto.

Correction/clarification: This story has been updated to reflect that Ontario has yet to implement a non-medical switching policy. The updated story also clarifies Nova Scotia and Saskatchewan’s current listing policies for biologics and biosimilars.

Copyright © 2021 Transcontinental Media G.P. This article first appeared in Benefits Canada.

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